Indonesian Private and State Sectors to Gear Up on Biodiesel and Palm Oil

Jakarta, Indonesia | April 21, 2008 by D-8 Secretariat

Trading company PTT will invest $28 million (€19 million) in palm oil production in Indonesia, including the acquisition of 95% of palm oil producer Mitra Aneka Rezeki for $14.75 million.

The company will also construct a new palm oil refinery which will open by 2012. Mitra Aneka Rezeki has 35,000 acres of palm tree operations in western Kalimantan.

In early February, PT Perkebunan Nusantara and five other state oil and gas firms announced plans to develop a palm oil biodiesel plant in Medan, North Sumatra, with construction due to be completed in 2009. The investors will also supply palm oil from their plantation operations.

State-owned consortium to set up Indonesia biodiesel plant

Meanwhile, Indonesian state-owned plantation firms have jointly set up a consortium for the construction of a biodiesel plant in Indonesia, aimed at supporting the government programme to develop alternative energy resources. The state firms involved include PT Perkebunan Nusantara (PTPN) III, PTPN IV, PTPN V and PTPN VII. PTPN III will act as the head party in the consortium.

‘The plant will be built in Medan, North Sumatra, near the source of raw material and we expect the construction to finish in 2009,’ PTPN VII’s director Andi Punoko says.

The consortium will function as investors as well as providers of raw materials. The use of biodiesel is expected to account for 10% of the firm’s total production costs, which reached Rp 30-40 billion (€2.2-3 million) a year.

The four state firms engage in the cultivation of palm oil and rubber, as well as producing crude palm oil, palm kernels, latex, crumb rubber and rubber smoked sheet. State oil and gas company PT Pertamina will help distribute the biodiesel fuel. PTPN VII’s production capacity for palm oil reaches around 200,000 tonnes a year, or 10% of the total output from all state plantation firms. PTPN III contributes the largest portion reaching 2 million tonnes a year.

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